Question 1

What is a good ROI for real estate?

Accepted Answer

Good real estate ROI: Rental properties: 8-12% annually, Flipping houses: 10-20%, REITs: 6-10%. Cash-on-cash return of 8%+ is considered good. Cap rate of 5-10% varies by location.

Question 2

How to calculate real estate ROI?

Accepted Answer

Real Estate ROI = (Annual Rental Income + Appreciation - Expenses) / Total Investment × 100. Or use total return: ROI = (Final Property Value + Rental Income - Initial Investment) / Initial Investment.

Question 3

What is cap rate in real estate?

Accepted Answer

Cap Rate = Net Operating Income / Property Value. Higher cap rates indicate higher returns but often higher risk. 4-6% is typical for stable properties, 7-10% for higher-risk or value-add properties.

Question 4

Should I use ROI or cash-on-cash return?

Accepted Answer

Use cash-on-cash for leveraged investments (with mortgage). Use cap rate to compare properties regardless of financing. Use ROI for full picture including appreciation and equity buildup.

Question 5

How long should I hold real estate?

Accepted Answer

Long-term holds (5+ years) benefit from appreciation and mortgage paydown. Short-term flips target quick returns in 1-2 years. Most experts recommend minimum 3-5 year hold for positive ROI.

Investment Type	Typical Annual ROI
Rental Property	8-12%
House Flipping	10-20%
REITs	6-10%
Commercial	7-12%
Vacation Rental	10-15%

(2026) Real Estate ROI Calculator – Property Investment Returns

Real Estate ROI Benchmarks